Copper’s Cold War

Copper’s Cold War

The US–China trade fight may have largely been a war of words so far, but the impact on global markets from each country’s opening shots has been swift – and copper is looking like collateral damage.

While the stand-out between the United States and China has sparked volatility and uncertainty, the International Monetary Fund (IMF) is warning that any real and sustained escalation in a trade cold war would not only harm the economic growth of both countries, but would drag down world growth, too.

The United States imposed a 25 per cent tariff on $50 billion worth of Chinese imports earlier this year, and added a 10 per cent tariff on another $200 billion worth of products in September, but is threatening to raise them higher unless China makes concessions.

In retaliation, China – which the IMF says will fare worse from any full-on trade war – imposed a 25 per cent tariff on $50 billion of US imports, with variable tariffs on a further $60 billion of the country’s products.